Define “Moneyness” in the Context of Option Pricing.
Moneyness is a classification of an option's relationship between its strike price and the current price of the underlying asset. The three classifications are: In-the-Money (ITM), At-the-Money (ATM), and Out-of-the-Money (OTM).
Moneyness determines the option's intrinsic value and significantly influences its Delta and other Greeks.
